Maaden’s Q3 profit in-line with estimates, says Al Rajhi Cap
Saudi Arabian Mining Company (Maaden) net income of SAR 518.8 million in the third quarter (Q3) 2018 came in-line with Al Rajhi Capital’s expectations with top-line and bottom-line coming 1.1 percent and 2.5 percent above their estimates, respectively, the brokerage firm said in an earnings review.
“Overall production costs grew lower than our expectation (q-o-q), offsetting higher than expected SG&A expenses, resulting in operating profit coming closer to our estimate,” Al Rajhi Capital added.
The firm expects commodity prices to remain broadly flat in the coming quarters, except for Gold and Aluminum, which may remain under pressure due to higher interest rate environment and trade concerns.
“The key upside risks could be attributed to higher than expected sales volume and material decline in cash costs, while weak commodity prices, unexpected increase in cash costs and rise in SAIBOR may act as the key downside triggers”, the report said.
The investment arm of Al Rajhi Bank remained positive on Maaden’s long term growth prospects, as the MWSPC and MRC plants continue ramping up production and are likely to begin the commercial production in the near term.
Al Rajhi Capital upgraded its recommendation on Maaden’s stock to “neutral” from “underweight”, however, it kept the target price unchanged at SAR 49.5 per share.